Memec up for sale as parent group merges

Veba Electronics on the block

The world's third biggest electronics component distie is up for sale following the merger of its parent company. Veba Electronics, a $5 billion t/o company, is the subsidiary of Veba AG, a massive diversified German conglomerate that yesterday announced its intention to team up with Viag AG (another massive diversified German conglomerate). Post merger, the enlarged massive diversified German conglomerate will slim down to its energy and specialty chemicals constituents, leaving it as a massive, focused German conglomerate. The upshot is that Veba Electronics has been put into play. In Europe, Veba Electronics businesses include Memec and EBV Elektronik. It also has four big distie subs in North America and a wafer manufacturing fab in California. The options for Veba Electronics look simple enough: trade sale, IPO, MBO or fund buyout. An IPO doesn't look much of a goer -- physical distribution isn't exactly fashionable right now among the world's bourses. A trade sale could be an option -- but what would Arrow and Avnet (Veba's two bigger rivals) gain from buying Veba, except a lot more debt and a hell of a lot more headache? Maybe they're so paranoid about each other, and so keen to consolidate the industry around the two As, that they'll put in their bids. But that would be a mistake. For these reasons, an MBO or fund buyout (or a combination of the two)look more likely. ®